Published in Jul-Aug 2022
When co-Founders of Abhi, Omair Ansari and Ali Ladhubhai decided to launch Abhi, a fintech company in July 2021, they were confident of success. Their confidence was well placed, as following a four-month pilot project, the app recently secured further funding of $17 million (led by the international venture capital, Speedinvest). Other investors include international companies such as FJ Labs, Global Ventures, RaliCap, Sturgeon Capital, VEF and VentureSouq, as well as Pakistan-based VCs Fatima Gobi, i2i Ventures and Sarmayacar.
According to Ansari, Abhi aims to “empower Pakistanis financially. Our goal is to help businesses and consumers with real-time, Shariah-compliant financing, digitising manual payment processes and be there for people when they need us the most.”
To fulfil these objectives, Abhi provides a number of features and services. The first and most popular is Earned Wage Access (EWA) and it allows the employees of those organisations that have signed up with Abhi to access their accrued income 24/7 through Abhi’s mobile app or SMS.
Currently, the EWA facility is only available to people whose employers have signed up with Abhi, although a recent collaboration with Bank Al-Falah and UBL will enable people whose salaries are deposited with these banks to benefit from the facility even if their employer has not signed up with Abhi. EWA customers are charged a fixed fee on every transaction and this amount is deducted from their forthcoming salary. At the moment, this fee is the primary source of revenue for the app and Abhi does not charge the organisations that sign up with them.
Abhi’s other features include Invoice Factoring, a financial wellness service, whereby businesses can borrow against future cash flows; Payroll Processing and Payroll Financing. The organisations that sign up with Abhi have to be financially sound and this is determined by credit checks that include cash flow, profit margins and other matters pertaining to legal and taxation issues. The registration process usually takes up to a week.
So, how and why did Abhi’s founders feel the need for such an app? They studied current economic trends and realised that in today’s day and age, when inflation is on the rise, approximately 80% of people living in Pakistan live from paycheque to paycheque, making it extremely difficult for them to manage unexpected expenses or take advantage of opportunities that may arise, such as discounts or investments, as they require immediate liquidity. Under these circumstances, the only option is to borrow from friends or family, ask for an advance on their salaries or apply for a loan.
The vision behind Abhi is to “empower salaried individuals and change the landscape of how company payrolls are managed,” says Ansari. According to him, over 1,200* organisations have signed up with Abhi, and include Chase-Up, Human Resource Solutions International (HRSI), Cnergyico (formerly Byco), Dairyland, Gul Ahmed, Soorty Textiles, TPL Corp and United King. Furthermore, an estimated 650,000 salaried employees are using Abhi’s features.
Aurora spoke with several people who work at organisations that use Abhi and they have expressed their appreciation of the app. For example, Ahmed Ali says, “Abhi is like a reliable friend that I can reach out to during times of need.” Sara Mujahid says “Drawing part of my salary in advance means less stress and more productivity.”
One of the major challenges Abhi faced when securing organisations to sign up with them was resistance on the part of decision-makers to adapt and use the technological financial features that Abhi provides. It was only after they were convinced of the reality that almost 50% of the employed population in Pakistan earn less than Rs 77,000 a month and find it difficult – or impossible – to make ends meet, that they were persuaded to sign up so that their employees could use the EWA facility. A major selling point for Abhi is the fact that by signing up, companies are actually doing something for their employees without it affecting their own cash flows.
Abhi is entering into strategic partnerships with various organisations to provide more features to their users. These include working with Waada, an insurtech, that provides medical insurance to people whose employers have signed on to Abhi free of cost. This collaboration is the first of its kind in Pakistan. Abhi also collaborates with PayPro, which enables users to make PayPro payments to various e-commerce websites via the app. Furthermore, Qist Bazaar, an e-commerce site that provides consumers with products in instalments, has introduced a new feature on their app called Abhi Khareedo, which allows Abhi users to purchase items on Qist Bazaar’s website (such as household items) in instalments and pay for the first instalment via their accrued salary.
To market Abhi, the team has focused on social media to reach out to their target audience – men and women who are part of the country’s workforce, work at reputable organisations and require financial assistance. They use case studies online to showcase how they can help people and organisations handle their finances better and make smarter financial decisions. At the moment, all marketing and advertising initiatives are handled in-house.
Ansari says that there is no other app like Abhi in Pakistan so far, although he is prepared to face any competition that is in the offing. In his words, “these are hard times for the common man and we have come in to extend a helping hand.”
*The correct number is 200 and not 1,200 as stated in the article. The error is regretted.